POLICY LANDSCAPE - September 8, 2017 - Roundtable Weekly

President Trump Cuts Deal with Democrats to Provide Hurricane Harvey Relief, Raise the Debt Ceiling and Extend Government Funding Until Dec. 8

Congress returned from summer recess this week to pass a stunning deal reached between President Trump and congressional Democrats that provides immediate assistance to victims of Hurricane Harvey while delaying crucial fiscal deadlines until Dec. 8. (Wall Street Journal, Sept 8) 

Capitol Twiliight

 Congress returned from summer recess this week to pass a stunning deal reached between President Trump and congressional Democrats that provides immediate assistance to victims of Hurricane Harvey while delaying crucial fiscal deadlines until Dec. 8.

The assistance package passed by the Senate yesterday and the House today provides approximately 15 billion dollars in disaster relief to communities affected by Hurricane Harvey; suspends the debt ceiling; and extends funding for government operations for three months. With Hurricane Irma bearing down on Florida, the package also extends the National Flood Insurance Program (NFIP) until December 8.

After today’s House vote (316-90), President Trump is expected to sign the package into law today. (Bloomberg, Sept 8)

The agreement between Trump, Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) sets up another fiscal cliff scenario in December, when many government programs of importance to financial markets and commercial real estate will once again face the prospect of a shut down. 

Extensions for NFIP, EB-5; FAA Reauthorization Anticipated in Separate Measure

Although the legislative package passed by Congress extends funding for the National Flood Insurance Program (NFIP) and the EB-5 foreign investment program, re-authorizing the Federal Aviation Administration (FAA) – which is still scheduled to expire on Sept. 30 – was beyond the Continuing Resolution deal’s scope.  This past summer, both House and Senate committees with jurisdiction over the FAA passed measures to reauthorize the agency. The key difference between the two bills is that the House version (H.R. 2997) would privatize air traffic control operations, while the Senate bill (S. 1405) does not.

The bill introduced by House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) also contains a provision that could affect the allowable heights of buildings near airports — the FAA’s One Engine Inoperative (“OEI”) policy change proposed during the Obama Administration.  The OEI policy could change decades-old standards and compel the FAA to consider the possibility of a plane engine failing on takeoff when determining if a structure poses a hazard to navigable airspace.  Approximately 4,000 buildings near 380 airports throughout the U.S. could be “non-conforming” if OEI policy changes were to take effect.

As the House and Senate move to resolve differences in their respective plans for FAA reauthorization this month, The Roundtable and industry partners will continue to advocate for inclusion of OEI “good governance” language for rulemaking and cost-benefit analyses in any package that Congress may ultimately pass before September 30.  (Roundtable Weekly, June 23)   

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Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA)

The EB-5 foreign investment program will now receive its seventh short-term extension since September 2015. (Roundtable Weekly, Dec. 18, 2015).  Discussions are expected to continue in the coming months among congressional offices and industry stakeholders about forging a longer-term compromise to reauthorize the program and improve its integrity, with long-overdue fraud deterrence measures and national security reforms.

Both the House and Senate are also working to improve and reauthorize the National Flood Insurance Program (NFIP) that has been extended until December 8.

Reauthorization of the NFIP is important for residential markets, overall natural catastrophe insurance market capacity and the broader economy. However, the NFIP's low commercial limits make it problematic for most commercial owners.  The Roundtable has advocated for a voluntary exemption for mandatory NFIP coverage if property owners have flood coverage from commercial insurers.

Flood insurance is typically available through commercial property insurance policies if the property is NOT located in a Special Flood Hazard or Coastal High Hazard area as designated in the flood zone maps – developed by the Federal Emergency Management Agency (FEMA), which oversees the (NFIP).    

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Along with our coalition partners, The Roundtable is supporting NFIP reauthorization with the inclusion of provisions that permit the "commercial exemption."

 

Under the NFIP, commercial property flood insurance limits are very low – $500,000 per building and $500,000 for its contents.  Lenders typically require this base NFIP coverage, and commercial owners must purchase Supplemental Excess Flood Insurance for coverage above the NFIP limits. A niche market of carriers typically provides this type of excess coverage.Along with our coalition partners, The Roundtable is supporting NFIP reauthorization with the inclusion of provisions that permit the "commercial exemption."

Amid other upcoming policy debates this fall such as tax reform and action on the Deferred Action for Childhood Arrivals (DACA) program, a new Fiscal Year 2018 budget resolution is also vital for policymakers to address.

For congressional Republicans to pass a tax reform bill with a simple majority of votes –  instead of the 60 usually needed in the Senate – a new budget resolution for FY18 must first be passed. This budget proposal, which provides an outline of federal spending priorities for next year, will include "reconciliation" orders for tax reform. Without reconciliation, a tax bill may not move forward this or next year.

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